Power plant sale still on table

September 7, 2012

ESCANABA - The sale of the Escanaba power plant to Escanaba Green Energy is still on the table despite EGE's failure to to meet payment deadlines.

EGE planned to purchase the coal-powered facility and convert it to burn biomass. In March, the company offered the city $1.5 million for the plant, however the deadline for payment was moved back repeatedly.

The selling price for the plant was upped from $1.5 million to $1.6 million after EGE failed to meet the already pushed back July 31 deadline. According to EGE President Charles Detiege, EGE missed the deadline because the loan process was taking longer than expected.

At the Aug. 3 meeting, the Escanaba City Council voted to extend the deadline to Aug. 31. However, according to City Manger Jim O'Toole at Thursday's council meeting, EGE failed to meet that deadline as well.

"As people are aware, we did enter into an asset purchase agreement with Escanaba Green Energy and under that agreement we were to enter into escrow on Aug. 31," said O'Toole. "The buyer was still working on the financing of the project so we did not enter into escrow on the 31."

Despite EGE's repeated failures to produce funding, all other paperwork has been prepared and submitted. "Both parties were prepared to deliver the executed documents or signature pages into escrow," said O'Toole.

The city is in the process of preparing a recommendation for the council and the Electrical Advisory Committee. The recommendation will be presented at the EAC meeting on Wednesday, Sept. 12, at 6 p.m.

In other business, council chose not to move into closed session to discuss and approve collective bargaining agreements and a cost of living adjustment for non-union personnel.

Teamsters Local 486 Public Safety Command Unit will receive a 1 percent pay raise. The raise will cost the city's general fund approximately $8,000.

Officers and dispatchers represented by the Teamsters union will receive a 1 percent pay raise and a 9 cent per hour increase in the public safety shift differential. The increases will cost the general fund approximately $16,400 and will increase dispatch authority costs by about $3,500.

Water and wastewater workers represented by the Teamsters union will not receive a pay raise in the 2012-13 fiscal year as part of their new two-year contract. On July 1, 2013 they will receive a 1 percent pay increase which will cost the water fund around $4,600 and the waste water fund around $3,000.

Non-union city employees will receive a 1 percent cost of living increase. The increase will cost the city around $12,000 spread over departmental funds.

Part of the reason for the increases was a loss of benefit value caused by the Publicly Funded Health Insurance Contribution Act. The act, which went into effect on Jan. 1, requires all city employees to pay 20 percent health care premiums on insurance offered through the city.

The roughly $47,300 cost to the city was discussed by the council. "Looking at the percentage increases that this group has received over the past five years, I think it's much more than what our residents have seen," said council member Ronald Beauchamp.

Other council members felt more positive about the changes. "I've watched these other budgets and I'm telling you, we've got a pretty fair deal here, and if we continue to keep our costs down I think this is a good deal for all parties," said Brady Nelson, mayor pro tem.